Fiscal Policy in Nigeria: Any Role for Rules?

July 1, 2003

Preview Citation

Format: Chicago

Thomas Baunsgaard. Fiscal Policy in Nigeria: Any Role for Rules?, (USA: International Monetary Fund, 2003) accessed November 9, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Fiscal policy in oil-producing countries can be profoundly affected by oil revenue uncertainty and volatility. Policy formulation should factor in the exhaustibility of the natural resources and aim at reducing oil revenue volatility passed on to the economy. Past fiscal policy in Nigeria has not been successful in this regard, since both revenue and expenditure have been highly volatile, to a large extent reflecting oil price developments. The paper discusses the role an appropriately designed fiscal rule, nested within the long-run sustainable use of oil revenue, could have in providing a more stable framework for fiscal policy formulation. It also highlights practical implementation and transitional issues.

Subject: Commodities, Fiscal policy, Fiscal rules, Oil, Oil prices, Oil, gas and mining taxes, Prices, Taxes

Keywords: Exchange rate, Fiscal policy rules, Fiscal rules, Gas and mining taxes, Government activity, Government wealth, IMF staff country report, Nigeria, Nigerian authorities, Nonrenewable resources, Oil, Oil prices, Oil revenue, Oil-producing countries, Price rule, Revenue, Revenue volatility, Taxation regime, WP

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/155
Stock No:

WPIEA1552003
ISBN:

9781451857337
ISSN:

1018-5941

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